With an endowment that includes a top-notch educational system, leadership in industries like industrial and automotive manufacturing, first-rate infrastructure, and a professional culture infused with a strong work ethic and repeatable processes to produce high-quality goods and services, Japan's economy was ranked as the third largest in the world in 2020. 

Yet, Japan’s productivity has gone from stagnant to declining, a course that needs imminent reversal to remain globally competitive. On the rise are competing nations making significant productivity gains through the development of technical talent and the application of proven digital technologies that include cloud-based infrastructure and software, mobile devices and apps, machine learning and deep learning, and many others.

• Digital talent: A bold plan to more than triple the bench of digital talent, focusing disproportionately on software developers, data engineers, data scientists, machine learning engineers, product managers, agile coaches, designers, and other types of new jobs. This is in addition to the continued deepening of hardware talent, which is already a strength. Achieving this requires a mindset shift that software expertise is just as valuable as traditionally Japanese-prized hardware or non-software-engineering disciplines. These big moves will also call for upskilling of the workforce and the digitization of the education sector itself.
• Industry transformation: Leapfrog moves by the four core industry sectors that contribute nearly 50 percent of Japanese GDP: industrial and automotive manufacturing, wholesale and retail, healthcare, and financial services. All of these sectors have single-digit digital-penetration metrics, such as the number of digital-manufacturing lighthouse factories or the percentage of e-commerce penetration. Their value chains have potential to scale up more than 100 proven use cases that leverage cloud-based applications, machine learning, deep learning, e-commerce technologies, the Internet of Things (IoT), 5G, cybersecurity, and others to drive an increase in revenues and a reduction in costs and expenses. By 2030, Japan needs an artificial-intelligence-enabled industrial sector, digital healthcare at scale for the elderly population, omnichannel retail experiences, and a modern, streamlined mobile-banking system underpinned by a globally interoperable frictionless payment infrastructure.
• Digital government: A strategic commitment from the government to drive connectivity, cybersecurity, and the availability of cloud resources to build a new wave of applications. More importantly, this big move requires the build-out of digital applications in the public sector to digitize the services it provides to citizens and businesses and doing away with lengthy processes that require physical visits, paper, seals, faxing, and other analog methods.
• Economic renewal: Japan has more than half of the world’s oldest founded companies, many of which are facing declining revenues and profitability. The country needs to inject economic renewal. This renewal mandate is best suited for the start-up ecosystem, which needs to boldly address global customer problems with software, shifting from its current inward and hardware focus. Reforms are needed to encourage founders, attract talent, and enable start-ups to scale. Another key to economic renewal involves the transformation of Japanese systems integrators: they account for over 60 percent of Japanese technology-related spend and 70 percent of IT hired talent, and it is crucial that they bring their clients along on the journey. Japan’s digital transformation will require bringing talent and technology back into the core operations of businesses, and systems integrators need to develop new business models to help their clients make the transition.

A methodology that enables these huge changes to get from idea to impact will be necessary for their execution. Some significant insights were gleaned from a survey on the development of numerous ICT (information, communications, and technology) efforts over the previous ten years that was done for this project. Progressive initiatives begin with conversations between the many counterparts, are structured into tangible action plans, have single-threaded leadership responsibility, demonstrate early momentum in a good way, and promote participation all the way through. On the other hand, programs that did not demonstrate progress were hampered by inadequate funding, a risk-averse culture, and a lack of formalization.

The Japan narrative may prove to be among the most inspirational historical shifts by 2030. Japan has the proper resources, including intelligent people and high-quality assets; the technology needed to construct is currently easily accessible; and the majority of the obstacles to change are mental in nature. The biggest obstacle to any transition, however, continues to be shifting deeply ingrained mindsets. To overcome this, strong leadership, an unwavering focus on execution, and a broad capacity for adaptation are needed.